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Issues: (i) Whether proceedings under the Prevention of Money Laundering Act, 2002 could be quashed where the petitioner was not shown as an accused in the predicate offence and a separate disproportionate-assets proceeding had been closed; (ii) whether the facts disclosed a case fit for quashing at the threshold.
Issue (i): Whether proceedings under the Prevention of Money Laundering Act, 2002 could be quashed where the petitioner was not shown as an accused in the predicate offence and a separate disproportionate-assets proceeding had been closed.
Analysis: The governing principle was that a person need not necessarily be arraigned as an accused in the scheduled offence to face proceedings under the Prevention of Money Laundering Act, 2002. At the same time, if the predicate offence itself is quashed, discharged, or results in acquittal, the benefit may extend to the person concerned in the money-laundering case. Here, the first predicate case was still pending and had not been quashed or dropped. The later disproportionate-assets case was independent and its closure did not control the present money-laundering proceeding, which arose from the earlier predicate offence.
Conclusion: The ground for quashing based on absence of the petitioner as an accused in the predicate offence and the closure of the separate disproportionate-assets case was rejected.
Issue (ii): Whether the facts disclosed a case fit for quashing at the threshold.
Analysis: The material collected indicated alleged involvement of the petitioner in the underlying racket, including random inspections, demand of illegal gratification, and accumulation of unexplained assets. The controversy turned on disputed questions of fact and the sufficiency of the material was a matter for trial, not for exercise of quashing jurisdiction at this stage.
Conclusion: No ground for interference at the threshold was made out.
Final Conclusion: The application for quashing failed, and the money-laundering proceeding was allowed to continue before the trial court.
Ratio Decidendi: Proceedings under the Prevention of Money Laundering Act, 2002 may continue even against a person not named as an accused in the scheduled offence, unless the predicate offence itself has been quashed, discharged, or ended in acquittal, and disputed questions of fact are not to be resolved in quashing jurisdiction.
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